Finding the business case for cloud

I went to New York two weeks ago with a single cloud question still lingering in my head. What is the real technical advantages that are driving people towards cloud. Why is this something I should be considering or advocating at work?

Cloud is both a marketing term and a technical term that I am hearing from every vendor, in lots of variation. But as I posted earlier, I can’t see the clear cost savings or footprint reduction associated with cloud that we saw with virtualization. If anything, cloud seems to create new work for IT departments. So, why is this something to move forward with?

I believe I may have found an answer in New York at HP’s Pathways to Cloud event, an annual road show event to take the cloud message to HP’s customers, partners and employees around the country. Unlike other changes to the datacenter, it is business and not technological advances that is driving the adoption of cloud. (I had heard this before and obviously forgotten it.) Cloud is more agile, to borrow from the HP dictionary, meaning that the turn around necessary to deploy new solutions on the cloud is measured in hours rather than weeks with traditional IT and procurement. Business is now dictating quick turn around of the supporting services that they need to meet customer needs faster.

It is known fact that many business groups have circumvented IT all together and outsourced their CRM and other software packages with Software as a Service providers like Salesforce or Sugar CRM. These services only require a credit card to get started and there is no infrastructure or other involvement really necessary from IT. That is a scary proposition for IT, a serious threat to their long term role in organizations and a catalyst for IT departments to change.

But operationally, cloud presents a value proposition because it moves the type of cost from a capital investment to an operational investment which can impact a company’s financials in different ways. Instead of the traditional, large up-front costs associated with IT expenditures, cloud provides a pay-as-you-go or pay-as-you-grow scenario for companies to buy IT in measurable, hourly amounts.

The Pathways to Cloud event introduced to me a couple of really compelling use cases for cloud by organizations, albeit organizations much larger than the one I work for. One of these use cases is for segregation of business units. For instance, a lot of companies will toy with a new idea but are not sure it will ultimately stay in their core business. By encapsulating the business into a cloud partition, all of the data is ready to be portable if the ultimate decision is to spin it off or if the decision is to bring it in-house. By using an on-demand service provider, they can evaluate the business and operation before standing up their own infrastructure and making significant capital investment.

Another use case would be for game makers. The example given was that most mobile game makers now know within two weeks whether a game concept is going to gain traction and ultimately be a hit or not. If it is, they bring it in house and stand up the appropriate supporting resources – if not, they keep it on a pay-for-demand cloud service outside of their realm where it can easily be decommissioned once its run its course.

HP CloudSystem is not meant to be a rip and replace system, but rather a start small and scale out solution. This makes a lot of sense since the transition to cloud technology will be a gradual basis and

For the first time, I saw presented a group of criteria to move to the cloud and in a lot of ways the transition to the cloud will be a lot like companies transition to the virtualization in the datacenter. Even as recent as the last two years, there were hold outs on some business critical software which was still not ‘recommended’ to run in virtualization for a lot of companies, but even HP is echoing the VMware message that there is nothing that cannot be virtualized at this stage of maturity for virtualization.

But specifically about the criteria, some of the things to be considered around cloud are compliance and data residence issues, especially for European companies which may have regulatory issues with export of their data. Also, security concerns come into play with whether the application is able to be offloaded to the cloud.

As far as pricing is concerned, there are a lot of options for companies here. Companies can choose to pay retail prices with service providers like Savvis or Amazon Cloud if they know that their consumption or the utilization is going to be light, or they can go further to lock down wholesale prices, much in the same way that hosting providers like Rackspace have done in the past.

Disclosure: HP’s Social Media group and Ivy Worldwide invited me and paid for the trip to this event. My coverage here is my own set of impressions and interpretation of the information presented and has not been coached or proofread by staff from Ivy or HP. There were no requirements to write anything in particular or anything at all in return for the invitation.

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Philip is a IT solutions engineer working for AmWINS Group, Inc., an insurance brokerage firm in Charlotte, NC. With a focus on data center technologies, he has built a career helping his customers and his employers deploy better IT solutions to solve their problems. Philip holds certifications in VMware and Microsoft technologies and he is a technical jack of all trades that is passionate about IT infrastructure and all things Apple. He's a part-time blogger and author here at Techazine.com.

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